[ISN] Bank glitch leaves 10 million Canadians without paycheque

From: InfoSec News (isn@private)
Date: Sun Jun 06 2004 - 23:35:24 PDT

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    Forwarded from: Mark Bernard <mbernard@private>
    Dear Associates,
    A rather sigificant lack of information security practices and
    procedures has created a rather large problem where 1/3 of Canadians
    haven't been paid!
    June 4, 2004
    Times & Transcript Staff
    Computer problems plaguing the Royal Bank of Canada has caused payroll 
    paralysis across the country, affecting more than 10 million people 
    nationwide with the end for some unpaid clients not expected until the 
    More than 10,000 provincial government employees, including Premier 
    Bernard Lord, were not paid yesterday leaving $11.4 million in the 
    government's bank account until the massive computer failure is fixed. 
    The payroll problem didn't end with the government; more than 3,000 NB 
    Power employees were impacted as well as 125 City of Moncton workers 
    who were left without a pay cheque.
    Finance Minister Jeannot Volpé said the province is helpless in the 
    "It is not something that we can fix ourselves," Volpé said.
    "It is very unfortunate for all the employees that were impacted but 
    there is nothing that we can do about it."
    By the end of business hours yesterday, Volpé said employees who use 
    the Royal Bank, Bank of Montreal, CIBC and Toronto Dominion-Canada 
    Trust should be paid but
    those using the Scotiabank, credit unions and other financial 
    institutions would have to wait until today.
    The finance minister also noted that some of the province's direct 
    deposit payments to vendors and to people receiving family support 
    orders have been affected.
    Government workers were not complaining about the computer problems 
    yesterday as they were leaving for their lunch break.
    "Honestly it doesn't really affect my life today, no," said Micheline 
    "It is something that happens and we are used to computer glitches in 
    the computer system."
    Jim Knight, a government worker, said he knows he's going to get paid 
    eventually and he feels worse for the bank's computer technicians.
    "We've all been there and I hope it turns out well for them," Knight 
    The Royal Bank issued a statement late yesterday indicating all 
    transactions made as of Tuesday have been updated and all money 
    movement made as of Wednesday is expected to be reflected in client 
    balances today. But transactions made yesterday are not anticipated to 
    be processed until the weekend.
    In situations where customers had been expecting to be paid and have 
    necessary purchases, such as groceries, scheduled for the weekend, the 
    Royal Bank is recommending they visit their local branch immediately.
    "The branch will work with them and see if they can accommodate the 
    client," said Lori Smith, a Halifax-based spokeswoman for the bank.
    Bank branches were kept open later yesterday and Smith said, if there 
    is a need in various communities today, business hours will be 
    extended again.
    As for individuals who have automatic withdrawals scheduled with other 
    financial institutions, Smith said customers should not worry about 
    late fees, overdraft charges or damaged credit ratings.
    "All of the other financial institutions know and understand what is 
    happening and we've asked for their co-operation in getting through 
    this time," she said.
    The bank has said the processing disruption was created during a 
    routine programming update to one of the institution's computer 
    systems. Despite the problems, bank officials are underscoring to 
    their clients that their money is safe and secure.
    The banking problems caught many employers off guard yesterday.
    A City of Moncton spokeswoman could not estimate how much money was 
    not transferred to employees but confirmed the city's finance 
    department is keeping in touch with the Royal Bank to overcome the 
    The province's power corporation has been particularly impacted by the 
    computer problems as nearly $5 million has not been handed out to 
    "While in the past we've had problems with individual banks, we've 
    been able to rectify them on the same day," said Jeffrey Carleton, a 
    NB Power spokesman.
    "This is the first time in well over two decades that we've ever had 
    such a widespread problem in paying employees on the day that they are 
    supposed to be paid."
    NB Power's problems don't stop with the payroll department; large wire 
    transfers to vendors, which can range from $15,000 to well over $1 
    million, were delayed in recent days. The NB Power spokesman said, as 
    of late yesterday, all the wire transfers to vendors, such as fuel 
    suppliers or financial institutions, had been carried out and the 
    banking backlog did not impact smaller vendors.
    The power company has also been forced to make changes to its direct 
    deposit system for customers. Carleton said NB Power will not withdraw 
    funds from accounts that cannot pay because of the computer glitch and 
    will catch back up in the next several days.
    Stephane Robichaud, the director of provincial affairs for the 
    Canadian Federation of Independent Business, said he hasn't yet 
    received any complaints from the small businesses he represents in New 
    Mark E. S. Bernard, CISM, PM, PA,
    e-mail: mbernard@private
    Phone: (506) 375-6368
    Leadership Quotes: "People cannot be managed. Inventories can be
    managed, but people must be led," H. Ross Perot
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